| Fri 30 Nov 2007, 16:33 | | SJL - S & J Land Holdings - Announcement To Shareholders Regarding The |
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SJL
SJL
SJL - S & J Land Holdings - Announcement To Shareholders Regarding The
Disposal Of The Assets Of The Company
S & J Land Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/000139/06)
Share code: SJL & ISIN: ZAE000009965
("S & J Land" or "the company")
ANNOUNCEMENT TO SHAREHOLDERS REGARDING THE DISPOSAL OF THE ASSETS OF THE
COMPANY
1. Introduction
The board of directors of S & J Land wishes to advise shareholders that
the company has entered into an agreement in terms of which it will
dispose of all its assets (held through wholly - owned subsidiaries) to a
consortium of existing shareholders ("the Consortium") ("the disposal"),
full details of which are contained in this announcement.
The agreement governing the disposal is subject to the conditions
precedent set out in paragraph 7 below.
2. Rationale for the disposal
The board is of the opinion that the disposal offers more value to
shareholders than holding the assets concerned in the longer term given:
- the length of time it will take to clear the land;
- the uncertainty as to the cost of clearing and rehabilitating
the land;
- the time it will take to comply with environmental and other
legislation and to obtain certificates of closure from the
Department of Mineral and Energy Affairs.
3. Details of the disposal
S & J Land will dispose of 100% of the issued share capitals of, and all
claims on loan account against, its wholly- owned subsidiaries S & J Land
Investments (Proprietary) Limited, Simmer Extensions (Proprietary)
Limited and Simmer and Jack Land Development Company (Proprietary)
Limited for an amount of R56 805 000, which excludes a dividend of R5 000
000 to be declared by a subsidiary prior to implementation of the
transaction. The effective date of the disposal is 1 July 2007.
The Consortium consists of Cortrus Services SA, SIS SegaIntersettle AG,
Latitude Investments Limited and State Securities Incorporated.
The consideration of R56 805 000 will be settled as follows:
3.1 R47 297 730,90 will be discharged by way of the delivery of 20 126
694
ordinary shares in the company in terms of a specific repurchase
("the specific repurchase") of such shares from the Consortium ("the
repurchased shares").
3.1.1 The repurchased shares will be valued at 235 cents per
share and such value will be discharged by way of set off
against the consideration.
3.1.2 The repurchased shares will be cancelled and will revert
to authorised but unissued share capital in the company.
3.2 R9 507 269,10 will be paid by the Consortium in cash ("the cash
payment").
The delivery of the repurchased shares and the making of the cash
payment shall be effected against delivery of the relevant documents
of title in respect of the subsidiaries and the assignment of the
loan accounts to the Consortium.
The proceeds of the disposal will be invested in an interest bearing
account pending a decision as to the optimal utilisation thereof.
4. The properties
The subsidiaries are the owners of the property portfolio of the
company, consisting of 446.8 hectares of freehold property, being
previously proclaimed mining land having had a long history of mining
activity.
The land presently includes substantial overlying sand dumps and slimes
dams, which are in the process of removal, as well as the 90- metre and
240- metre underground mining contours, in respect of which building
development is prohibited at the 90 - metre contour and subject to
certain material restrictions at the 240 - metre contour.
The land is subject to the provisions of the Minerals Act and its
Regulations and other associated legislation. No mining activity is
currently taking place.
Approximately 100 hectares of the land adjacent to the southwest aspect
of Main Reef Road is currently illegally occupied by a large informal
community.
The Properties are described as:
4.1 Remaining Extent of Portion 2 of Farm Elandsfontein 90, Germiston,
Ekurhuleni Metropolitan Municipality, Registration Division IR,
Gauteng, in extent 363.3908 ha
4.2 Portion 531 of Farm Elandsfontein 108, Germiston, Ekurhuleni
Metropolitan Municipality, Registration Division IR, Gauteng, in
extent 75.5382 ha
4.3 Erf 1163 Germiston Extension 4, Ekurhuleni Metropolitan
Municipality, Registration Division IR, Gauteng, in extent 2.9892 ha
4.4 Erf 61, Jupiter Extension 4 Germiston, Ekurhuleni Metropolitan
Municipality, Registration Division IR, Gauteng, in extent 1.0018 ha
4.5 Remaining Extent of Erf 1172, Germiston, Extension 4, Ekurhuleni
Metropolitan Municipality, Registration Division IR, Gauteng, in
extent 3.9544 ha
5. Affected transaction
The disposal will be effected in terms of section 228 of the Companies
Act, 1973 (as amended), and constitutes an affected transaction in terms
of the Securities Regulation Code on Take- overs and Mergers ("the Code")
issued by the Securities Regulation Panel ("the SRP"). The Code
accordingly requires the board to obtain appropriate external advice and
the SRP has agreed that the valuation report referred to in paragraph 6
below will comply with this requirement.
6. The disposal and the specific repurchase
6.1 The disposal and the specific repurchase will constitute related
party transactions in terms of the Listings Requirements of the JSE
Limited ("the Listings Requirements" and "the JSE"), as the
Consortium is a material shareholder in the company (holding
approximately 76,5% of its issued share capital). The disposal and
the specific repurchase therefore require the approval of the
shareholders of S & J Land in general meeting, at which
general meeting the Consortium will not be entitled to vote on the
disposal or the specific repurchase. In addition, the disposal and
the specific repurchase are subject to the issue of a fairness
opinion by an Independent Professional Expert ("The IPE") in terms
of the Listings Requirements. The board of directors of the company
has appointed Charles Orbach & Company Corporate Finance
(Proprietary) Limited to advise it in this regard, which appointment
has been approved by the JSE. As part of this process, the company
has had prepared a valuation report on the property portfolio by
Frans van Aartsen, a registered property valuer. The valuation
report will be included in the circular to shareholders to be issued
in connection with the disposal and the specific repurchase ("the
circular").
6.2 The specific repurchase:
6.2.1 is currently not authorised by the company`s articles of
association and a special resolution amending the articles
of association to grant this authority is included in the
notice convening the general meeting of the company;
6.2.2 will not entail any payment by the company;
6.2.3 is subject to authorisation given in terms of a special
resolution of the company.
7. Conditions precedent
The conditions precedent to which the disposal and the specific
repurchase are subject are:
7.1 approval of the disposal and the specific repurchase and the
documentation required for implementation thereof by the relevant
regulatory bodies, including the JSE, the SRP and the Exchange
Control Department of the South African Reserve Bank;
7.2 approval of the disposal and the specific repurchase and the
resolutions required for implementation thereof by the shareholders
of the company in general meeting;
7.3 the issue by the IPE of a fairness opinion on the disposal and the
specific repurchase in terms of the Listings Requirements;
7.4 registration by the Registrar of Companies to the extent necessary
of the resolutions approved by the shareholders of the company;
7.5 a warranty by the company to the effect that the subsidiaries are
all wholly-owned, their latest audited financial statements fairly
present their financial positions and that there are no liabilities
in respect of any creditors, other than as disclosed in the
financial statements.
8. Financial effects of the disposal and the specific repurchase
The table below sets out the pro forma financial effects on S & J Land
of the disposal and the specific repurchase based on the audited
financial statements of the company for the financial year ended 30 June
2007. These financial effects are the responsibility of the directors of
the company, are prepared for illustrative purposes only and, because of
their nature, may not fairly present the financial position, changes in
equity, results of operations or cash flows of the company after the
disposal and the specific repurchase.
Before the After the Percentage
disposal and disposal and change
the specific the specific (increase/
repurchase repurchase (decrease))
Notes (cents) (cents)
Earnings per share 1, 3 17,71 222,18 1 154,37
Headline earnings
per share 1, 3 (2,31) 60,40 2 717,05
Tangible net asset
value per share 2, 3 197,55 222,18 12,46
Net asset value per
share 2, 3 197,55 222,18 12,46
Number of shares in
issue (`000) 26 300 000 6 173 306 (76,53)
Notes: applicable to "After the disposal and the specific repurchase" only
1. On the assumptions that the disposal and the specific repurchase
were effective throughout the financial year ended 30 June 2007 and
that the consideration had been invested in an interest bearing
account earning 9% before tax for 12 months.
2. On the assumption that the disposal and the specific repurchase were
effective on 30 June 2007.
3. On the assumption that a dividend of R5 000 000 was declared by a
subsidiary and costs and Secondary Tax on Companies of approximately
R2 200 000 were incurred prior to the effective date.
9. Effect of the disposal on the listing of the company
The disposal will result in the company being classified as a "cash
shell" in terms of the Listings Requirements and should it, within a
period of six months after such classification, fail to enter into an
agreement relating to the acquisition of viable assets that satisfy the
conditions for listing in the Listings Requirements, its listing will be
suspended.
10. The circular
The circular containing details of the disposal and the specific
repurchase and a notice convening a general meeting of the company will
be posted to the shareholders of S & J Land within 28 days of this
announcement.
By order of the board
Johannesburg
30 November 2007
Corporate adviser and sponsor
Arcay Moela Sponsors (Proprietary) Limited
(Registration number 2006/033725/07)
Attorneys
Fluxmans
Attorneys
Website: www.fluxmans.com
Fluxmans Inc. Registration No: 2000/024775/21
Auditors and reporting Accountants
ccf & associates
Chartered Accountants (SA)
Independent professional expert
Charles Orbach & Company
Corporate Finance (Proprietary) Limited
Date: 30/11/2007 16:33:25 Produced by the JSE SENS Department.
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